Anwar Industries has the following activity and cost data for the past year: What will the total cost be when 615 units are produced?
A) $7,010
B) $10,455
C) $15,620
D) $16,385

Question

Anwar Industries has the following activity and cost data for the past year:  What will the total cost be when 615 units are produced?
A) $7,010 
B) $10,455 
C) $15,620 
D) $16,385

Quizplus · Accepted Answer

High point is at 660 machine hours and low point is at 360 hours; Variable cost per unit = (Total cost at 660 hours, $16,250 - Total cost at 360 hours $12,050) ÷ Total hours at high point 660 - Total hours at low point 360) = $14.00; Total cost at high point $16,250 ? (Variable cost per unit $14.00 × Number of units at high point 660) = $7,010; Total cost at 615 units = Total fixed cost $7,010 = (Variable cost per unit $14.00 × Units at desired level 615) = $15,620.

Anwar Industries Has the Following Activity and Cost Data for the Past